443 B.R. 472
Bankr. D. Del.2011Background
- Plains Marketing, L.P. seeks leave to amend its original complaint to add two contract-based claims against SemCrude, L.P. and Eaglwing, L.P. (breach of warranty of title and indemnity for fees) in an adversary proceeding arising from Plains’ crude purchases.
- Debtors filed for Chapter 11 relief in 2008; Plains had purchased crude oil from the Debtors prior to bankruptcy.
- Plains filed seven proofs of claim before the Bar Date asserting reclamation, section 503(b)(9) payments, and contract remedies.
- Turnover Order required Plains to tender the Final Settlement Amount after netting, which Plains did not fully remit; later Plan confirmations followed.
- The Court previously allowed Plains to amend to name additional Producers; the current issue is whether Plains may amend to add the two contract-based claims against the Debtors.
- The Court ultimately grants Plains leave to amend the Amended Complaint to include the two claims, finding the claims are not “new” under the Bar Date and may be asserted through proofs of claim or informal proofs of claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether amendment is futile under Bar Date constraints | Plains’ contract claims are already asserted in proofs of claim | Amendment would introduce new claims post-bar-date | Not futile; claims are encompassed by existing claims and informal pleadings |
| Whether amendment would unduly prejudice Debtors | Amendment aligns with prior notice of Plains’ contract rights | New claims would prejudice Debtors | No undue prejudice found; adequate notice and prior filings show consistency with positions |
| Whether amendment would cause undue delay | Delay in seeking amendment within bounds of district practice | Delay could burden proceedings | Delay not undue; timely within precedent; insufficient ground to deny |
| Whether Plains may pursue recoupment and setoff given contract rights | Plains may assert indemnity and warranty rights; setoff rights exist | Waiver or lack of enforceable setoff rights | Plains may liquidate contract-based claims; not futile to include in Amended Complaint |
Key Cases Cited
- In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) (liberal amendment policy in complex litigation)
- Foman v. Davis, 371 U.S. 178 (U.S. 1962) (leave to amend freely granted unless prejudice or futility)
- In re DaimlerChrysler Sec. Litig., 200 F.Supp.2d 439 (D.Del. 2002) (purpose of amendment and prejudice considerations in securities actions)
- Planet Hollywood, Inc., 269 B.R. 543 (D. Del. 2001) (informal proofs of claim and contract-linked indemnity claims; treatment of attached contracts)
- In re Ben Franklin Hotel Associates, 186 F.3d 301 (3d Cir. 1999) (amendment to cure defects or plead new theories under existing claims)